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Multi-Lot Multi-Timeframe Position trading

  • #941
  • Feb 19, 2015 3:46am Feb 19, 2015 3:46am
Quoting IBreakOut
{quote} Hi Lemming, Thanks for the EA, I am looking ahead of reading feedbacks on how it performs. I wanted a bit comment on what you read and about your thoughts about the book G suggested to read. First of all, you said you read the turtle traders. Well the program was definitely very successful and I guess I will read it too. It has to be an interesting read. On the other side, an experienced trader friend of mine told me our last trade shows how good we are. You can accept this or argue with it but you should check how the great turtle trader...
Hi man,

I've not read it completely... what i've read is trend following, covel's first book. Well i think such an approach requires years to show up on its real value given the number of operations taken.

I do agree with G, knowing what cbanks do is essential for trading as we consider it. The point in that book is that you should trade all TRENDING markets, but of course a selection is at least useful.

I'm testing a different approach, mostly because i can see charts for a brief period just in the morning and the evening. Requires big risks taken but i tested it on eurusd trying to remember what central banks have done in the past and gave me soemthing like 7% yearly compounded. So started with 10k in 2000 and got 25k after 15 years.

Please tell me if i didn't answer completely.

L
  • #942
  • Feb 19, 2015 7:11am Feb 19, 2015 7:11am
Graviton,

A point I was hoping you could clear up for me. You've mentioned how you like to add your positions to a trade near the lows (uptrend) of local price action...buy low sell high...
It seems though that I only get my TF's to line up when price is making a new local high. Could you expand on that a bit.
Thanks
  • #943
  • Edited 9:35am Feb 19, 2015 9:19am | Edited 9:35am
Quoting spyderman
Graviton, A point I was hoping you could clear up for me. You've mentioned how you like to add your positions to a trade near the lows (uptrend) of local price action...buy low sell high... It seems though that I only get my TF's to line up when price is making a new local high. Could you expand on that a bit. Thanks
Yes, there is a bit of a conflict there. As you pointed out, we want to enter a new lot when momentum is increasing as signified by all timeframes lining up, but If the market will offer us a better price for waiting a bit, we want the better price as well. The question then becomes, will the market offer us a better entry for waiting? If not, we should enter, if so, we should wait. Some would say these few pips aren't worth worrying over and just go ahead and enter, but as I will point out, on rare occasions, avoiding entering on a local maximum can save lots more than just a few pips. On rare occasions we are right on the peak price just before a deep retrace that can run 100 pips or more, and a new entry is sure to fail. This is a bit like scalping an entry. I do it mostly by gut feel, but I'll try my best to put it in words.

We have already verified the longer timeframes are all moving in our direction, so we are only concerned with the very short TF's at this point. Like a typical scalping strategy, we can drop all the way down to the 1M which should quickly get a pullback if we are at a local maximum. The 5M should follow shortly. If it doesn't, and the 1M heads back up, that's the entry. It wasn't much help in that case, about the same as just entering without the fuss over a few pips. If the 5M follows down, we wait until the 1M is trending up again and the 5M has at least made an up candle and enter there. In most cases, that will improve entry a few pips.

In some cases the 5M continues heading down. Now we know we were on a local maximum and price is going to retrace a bit before continuing back up in the direction of the longer TF's. We want to wait until that 5M retrace ends to enter, so 1M is again steadily trending up and 5M appears to have bottomed and is headed back up, likely to rejoin the main trend. That will improve our entry by a few more pips, maybe 15 or 20 on average.

In rare cases the retrace fights it's way up to the 15M timeframe and the 15M changes it's trend to down. This has the potential to either turn out to be a very good entry or a very bad one. We wait until the 1M and 5M are steadily trending back up and the 15M seems to have bottomed before taking our entry. This can improve entry by 30 pips or more since we are retracing deeply off a local maximum. If the retrace continues to dig deeper, to the 30 M or even the H1, we will have to reconsider this entry. Once the H1 is retracing down, our longer timeframe criteria is either violated or close to being violated. At that point, I wouldn't consider this operation to be scalping an entry. I'd consider the big picture of the trade. If the trade is young, I may need to take some profits here to protect equity and reduce risk, or just close out the trade entirely and start over when the H1 retrace is completed. if the trade is well established, I might reduce risk by taking off a lot in profit while I can, and try to ride out the H1 retrace. If it digs deeper, I may have to take off more profit or close the trade entirely using methods described earlier in this thread. In any case, we are no longer talking about scalping an entry, we are now talking about profit taking and controlling risk to equity and unrealized gains. The good news is, we avoided taking an entry on the very peak of a local maximum, and then suffering a deep retrace to our stop on it, and that was the point of your question and this post in reply.

G
  • #944
  • Feb 19, 2015 9:28am Feb 19, 2015 9:28am
Quoting Graviton
{quote} Yes, there is a bit of a conflict there. As you pointed out, we want to enter a new lot when momentum is increasing as signified by all timeframes lining up, but If the market will offer us a better price for waiting a bit, we want the better price as well. The question then becomes, will the market offer us a better entry for waiting? If not, we should enter, if so, we should wait. Some would say these few pips aren't worth worrying over and just go ahead and enter, but as I will point out, on rare occasions, avoiding entering on a local...
Very well explained, thank-you.
  • #945
  • Feb 20, 2015 12:42pm Feb 20, 2015 12:42pm
Quoting spyderman
{quote} Very well explained, thank-you.
OK, Let me know how that works for you.
  • #946
  • Feb 20, 2015 2:27pm Feb 20, 2015 2:27pm
I'll try to sum up a bit now. I'll list this out step by step as well as I can, and the reader can modify it as suits their trading style. Each trader will trade it a bit differently, but I'll try to give out a roadmap to at least get anyone interested started along the way.

Entry:
1. There are probably several good entry methods that can work with this system. The system does require we enter with the longer term trends and with price momentum in our direction. Use a simple deterministic method, so there is very little discretion and you don't second guess yourself. RSI above 50%, CCI above 0%, 5emaX10sma, or a regression are all decent deterministic entry signals. Pick one or a combination or use your own.
2. Don't trade against a central bank.
3. ALL timeframes should be moving in the direction of the trade to give an entry signal. Just wait as long as it takes, hours, days, weeks. Be patient.
4. Scalp the entry. Drop down to the 1M TF, wait for a small retracement. They happen every 10 minutes or so. When the retracement ends, that is the entry, UNLESS higher TF's have reversed. If they have, wait some more until they line back up. Lots of patience, very little entering required. It gets easier after about 1,000 or so tries. The longer term trend will usually correct any mistakes you make, so no worries.
5. Set your stoploss at a reasonable point, like between 0.5 and 2.0 times daily range. ALWAYS exit manually before the stoploss is hit if at all possible (it builds discipline). Look at it as an opportunity to practice cutting losses short.

Building a position:
6. Your entry position should be about 1/3rd of your regular trading amount. So if you usually trade 1.5% of account risk per trade, the initial entry should be about 0.5% of account. Spacing between lots should be near your sl amount. If you get ahead and you are ready to put the 2nd lot on, take the first one off in profit instead. This funds the trade and removes the risk. Then scalp the next entry on, which now becomes the bottom lot for a long trade.
7. Scalp the 2nd lot on when the spacing is correct. If you lose your spacing in the scalping process, just wait for the next opportunity. They come around very often. Move the first lot sl up to near where the entry was on the bottom lot. So now running two lots with no risk.
8. When you are ready to put the 3rd lot on, take the bottom one off in profit instead and scalp the new 2nd one back on top. Adjust the stops To near the entry of the bottom lot. You are now running 2 lots with locked in profit of 1 X spacing.
9. Next time you are ready to put the 3rd lot on, scalp it on, adjust stops to between the entry of the middle and bottom lot. You now have 3 lots running with no risk.

Managing the trade:
10. From here you just want to take lots off in profit off the bottom every time your spacing is made and scalp another back onto the top, maintaining that spacing. Repeat over and over. You can slowly increase spacing and sl amounts after the trade runs as more lots are taken off in profit, but NEVER put your trade in a position where a reversal or a quick spike can take away all your profit or make you exit negative. From this point on, you should never lose on this trade.
11. After taking off a few lots in profit, you can skip taking one off and increase the number of lots running from 3 to 4. After taking off another 4 or so, you can skip taking another off and go from 4 to 5 lots running. That's rare. Beyond that, more lots running doesn't improve results that much since it's just more that is lost back on the inevitable reversal. Just make sure that whatever you do from this point, you NEVER take a chance at a loss.
12. Eventually a reversal will absolutely take you out of the trade no matter what you do. DON'T try to save it at the expense of your gains. Bank your profits and let it go. Go find another trade. There will always be another. Repeat as necessary.

That's a 12-step program of what he have been discussing with regards to entering and managing these multi-lot trades. If there is a problem with any of this, we can discuss it and attempt to resolve it.

G
  • #947
  • Feb 20, 2015 2:51pm Feb 20, 2015 2:51pm
I like using multiple time frames especially when analyzing trading opportunities. For me multiple time frames are better used to confirm a trend, or better still test potential reversals. However, when it comes to trading itself, I only use one time-frame, that's is the daily candle charts.
  • #948
  • Feb 20, 2015 3:28pm Feb 20, 2015 3:28pm
Quoting moonshot
I like using multiple time frames especially when analyzing trading opportunities. For me multiple time frames are better used to confirm a trend, or better still test potential reversals. However, when it comes to trading itself, I only use one time-frame, that's is the daily candle charts.
Sure, that's fine. I'm sure there are many methods that work well. I haven't seen two winning traders that trade exactly alike. I suppose that in the end, each must find their own path. Best success.

G
  • #949
  • Feb 21, 2015 6:42am Feb 21, 2015 6:42am
Quoting Graviton
I'll try to sum up a bit now. I'll list this out step by step as well as I can, and the reader can modify it as suits their trading style. Each trader will trade it a bit differently, but I'll try to give out a roadmap to at least get anyone interested started along the way. Entry: 1. There are probably several good entry methods that can work with this system. The system does require we enter with the longer term trends and with price momentum in our direction. Use a simple deterministic method, so there is very little discretion and you don't...
GOLD!

Regarding my concerns. I still have a problem with entries, no problem in managing existing trades. The process you described is reasonably safe and at the same time should allow your profits to run.
Regarding entries, i still have the problem i can't watch my trades more than twice a day. So instead of trying establishing positions i'm gonna try to jump in at major S/R. I know i might lose some trades but there are a few advantages:
1) you try it one shot, unless price keeps testing the same line over and over. So you should not get all those "fake" entries.
2) Once your trade fails, given that stoplosses invalidates the main scenario, you can just sit and wait.
3) For me this approach would be always simpler to follow, given that i would use limit orders with predefined stoplosses.

Example of the week: both are approaching major resistances. I'll give a shot to both with tight stoplosses. If price hits stoploss and bounces back i'll reevaluate the entry.
Attached Image (click to enlarge)
Click to Enlarge Name: AUDUSDDaily.png Size: 28 KB
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDDaily.png Size: 27 KB



Please let me know what to you guys think.

Also, ccy pairs that i'll be monitoring this week.

audusd eurgbp gbpusd usdcad eurnzd nzdjpy nzdusd nzdcad gbpaud gbpcad
  • #950
  • Feb 21, 2015 7:46am Feb 21, 2015 7:46am
I use limits all the time. If you do your homework then you will find they work just fine.

4 questions to answer.

1) Where is the trend? (i.e. the one you are seeking to cash in on. there will usually be several layers of trend going on at any one time in different timescales)

2) Where are the barriers? (places of interest which traders will be watching closely and trding from. supports and resistances. Note the SnR swaps. a previous s/r that has been crossed turns into a powerful place to trade from when it is revisited).

3) At what price am I prepared to buy?

4) At what price am I prepared to sell?

Many/most trades turn into small gains/losses. But a few set up good long running trades from very advantageous places indeed.

Hope this helps.
  • #951
  • Feb 21, 2015 7:55am Feb 21, 2015 7:55am
Quoting nbfx
I use limits all the time. If you do your homework then you will find they work just fine. 4 questions to answer. 1) Where is the trend? (i.e. the one you are seeking to cash in on. there will usually be several layers of trend going on at any one time in different timescales) 2) Where are the barriers? (places of interest which traders will be watching closely and trding from. supports and resistances. Note the SnR swaps. a previous s/r that has been crossed turns into a powerful place to trade from when it is revisited). 3) At what price am I...
Well, in my previous graphs i hope i answered to all of those all the ccy pairs i've posted at the end of my previous post are trending on d/w/m tfs. Hope this works enough..
  • #952
  • Feb 21, 2015 11:34am Feb 21, 2015 11:34am
Quoting lemming78
{quote} GOLD! Regarding my concerns. I still have a problem with entries, no problem in managing existing trades. The process you described is reasonably safe and at the same time should allow your profits to run. Regarding entries, i still have the problem i can't watch my trades more than twice a day. So instead of trying establishing positions i'm gonna try to jump in at major S/R. I know i might lose some trades but there are a few advantages: 1) you try it one shot, unless price keeps testing the same line over and over. So you should not get...
You are looking at a short on AU and GU? You didn't say which way. The H4 is firmly trending up on AU. I wouldn't consider a short until it hits a top and starts back down. Daily is still tending up on GU as well. I'm not clear what you are trying to do here? I wouldn't trade against the H4 or Daily trend. This has nothing to do with how often you can check the charts. Those don't change very often at all, maybe once every couple weeks or so.
  • #953
  • Feb 21, 2015 11:38am Feb 21, 2015 11:38am
Quoting Graviton
{quote} You are looking at a short on AU and GU? You didn't say which way. The H4 is firmly trending up on AU. I wouldn't consider a short until it hits a top and starts back down. Daily is still tending up on GU as well. I'm not clear what you are trying to do here? I wouldn't trade against the H4 or Daily trend. This has nothing to do with how often you can check the charts. Those don't change very often at all, maybe once every couple weeks or so.
Hmmm the redlines are zones of major resistances. I would like to shot once per line short in both cases. I still have a lot to learn, a lot!
  • #954
  • Feb 22, 2015 11:42am Feb 22, 2015 11:42am
Quoting lemming78
{quote} Hmmm the redlines are zones of major resistances. I would like to shot once per line short in both cases. I still have a lot to learn, a lot!
Yes, I see. In some ways, this is the same as calling tops and bottoms of short trends in price. If you can do that consistently, I'm sure you could make lots of pips. I've seen people cherry pick past charts to show how they can do it, but I've never heard of anyone really making great consistent returns over a long period of time doing it. I've tried it and I just wasn't good at it. I managed to get a few hits, but never enough to overcome the costs of the misses.

For instance, if you use something like the 3emaX10sma combined with the 50% line of the RSI to define daily trend in a deterministic way, the GU has been generally trending up for the last 16 trading days. Price went through several resistances during that time. It could have turned down any day due to some BOE statement or something, but it didn't. Picking any single day for a turn would have basically yielded a 1 in 16 chance of success at best, unless you have some fortune telling super powers. I'm quite sure that I don't. Trading in the direction of the recent up trend would have yielded 200 to 250 pips profit to date from the time the indicator turned positive to now. Even if you give back half on a reversal when it finally occurs, it's still some nice pips.

With that said, if it works for you, go for it! I tried supply demand zones and about 100 other things before I found that trend following worked for me, and I'm not claiming here that it would work for anyone else. I'm sure some of the things I tried worked for someone else, but some were no better than reading tea leaves and I just couldn't see the logic in them. Best success.

G
  • #955
  • Feb 22, 2015 12:36pm Feb 22, 2015 12:36pm
Quoting Graviton
{quote} Yes, I see. In some ways, this is the same as calling tops and bottoms of short trends in price. If you can do that consistently, I'm sure you could make lots of pips. I've seen people cherry pick past charts to show how they can do it, but I've never heard of anyone really making great consistent returns over a long period of time doing it. I've tried it and I just wasn't good at it. I managed to get a few hits, but never enough to overcome the costs of the misses. For instance, if you use something like the 3emaX10sma combined with the...
I understand... you're right, i didn't see it this way before
Well, let's get ready for another week.
  • #956
  • Feb 22, 2015 4:21pm Feb 22, 2015 4:21pm
Quoting Graviton
{quote} Yes, I see. In some ways, this is the same as calling tops and bottoms of short trends in price. If you can do that consistently, I'm sure you could make lots of pips. I've seen people cherry pick past charts to show how they can do it, but I've never heard of anyone really making great consistent returns over a long period of time doing it. I've tried it and I just wasn't good at it. I managed to get a few hits, but never enough to overcome the costs of the misses. For instance, if you use something like the 3emaX10sma combined with the...
Hi G,

I do trade like you in the direction of the trend. Still, I will go for your "future telling super power" award. I will not come here very often with a signal but I will keep it in mind. Let`s say I get 5 chances to tell reversals live and we will see how often I will get it right.

You said in the current GU trend your chance was 1/16 (logical reasoning). So, getting a reversal right gives of course huge risk reward ratio with a tight stop loss. If I get 2-3 reversals right from my 5 chances, is it ok? Or what would qualify to you as a decent result?

Do not get me wrong, I am not saying at all how great a trader am I. I just would like to try it. We cannot lose with it anything anyway :-) I take it seriously and signals are coming very rarely anyway so we can see how it develops itself.

There can only be one problem: defining the difference between a reversal and a retracement. That can be a problem. So if I come up with something that a reversal happens and it only qualifies as a retracement for you then no one wins.

IBO
  • #957
  • Feb 23, 2015 1:28am Feb 23, 2015 1:28am
Morning situation i'm monitoring. Guys tell me what you think

gbpcad
https://www.tradingview.com/x/yWEhjsJs/

waiting for the rsi 4h come back and go up again.

gbpaud

https://www.tradingview.com/x/9msliYZi/

i like this a lot, waiting for 4hrsi to go up. We're also at a good support, which would give strenght to gains in the ccy pair.

eurgbp

https://www.tradingview.com/x/CQuWqqfT/

this looks good to. sl 7432 but wait the close of the 4h candle

audusd
https://www.tradingview.com/x/uxBTnnrI/

very good indeed. Charts speaks for itself.

I do like the last 3 trades, which i will be monitoring for entries at close of the 4h candle.. so in 2 and a half hour
  • #958
  • Feb 23, 2015 2:51am Feb 23, 2015 2:51am
Quoting lemming78
Morning situation i'm monitoring. Guys tell me what you think gbpcad https://www.tradingview.com/x/yWEhjsJs/ waiting for the rsi 4h come back and go up again. gbpaud https://www.tradingview.com/x/9msliYZi/ i like this a lot, waiting for 4hrsi to go up. We're also at a good support, which would give strenght to gains in the ccy pair. eurgbp https://www.tradingview.com/x/CQuWqqfT/ this looks good to. sl 7432 but wait the close of the 4h candle audusd https://www.tradingview.com/x/uxBTnnrI/ very good indeed....
Hi,

I like your analysis and charts. What gets my interest is the topic Grav already discussed, how many trades you choose and what is your risk on it? It is important because 3 of your trades are GBP trades so I guess you will not enter 3 of them at the same time with 1-2% risk each.

IBO
  • #959
  • Feb 23, 2015 4:10am Feb 23, 2015 4:10am
Quoting IBreakOut
{quote} Hi, I like your analysis and charts. What gets my interest is the topic Grav already discussed, how many trades you choose and what is your risk on it? It is important because 3 of your trades are GBP trades so I guess you will not enter 3 of them at the same time with 1-2% risk each. IBO
Hi, thanks! Anyway, no i jumped in on the gbpaud eurgbp with 1% each and Audusd with 2%. Not considering for now gbpcad, but i'll eventually jump in with 1% also.
  • #960
  • Feb 23, 2015 9:46am Feb 23, 2015 9:46am
forgot to post open positions

audusd sell 0.7788

gbpaud buy 1.9737

eurgbp sell 0.7360

let's see..
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